8 Civil Liability Civil liability for oil pollution is currently governed by the Merchant Shipping Act 1995, Part

VI, Chapters III-IV, which implemented the International Convention on Civil Liability for Oil Pollution Damage 1969/1992 (Cmnd 6183, 8238, Cm 3432) and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971/1992 (Cmnd 7383, Cm 3433). This makes the owners of ships strictly liable for any damage caused in the United Kingdom by contamination due to the discharge or escape of persistent hydrocarbon mineral oil. They are also strictly liable for the cost of any measures reasonably taken to prevent or minimise the damage caused by the discharge or escape, and also for any damage caused by those measures. In the case of ships carying bulk oil cargo, liability may be limited, and an indemnity for the balance provided by the International Oil Pollution Compensation Fund. Limitation of liability also applies to later voyages by combination carriers that have previously carried bulk cargoes of persistent hydrocarbon mineral oil, unless it is proved that no residues of oil remain in their tanks. Ships carrying more than 2,000 tons of bulk oil cargo may not enter or leave port without a certificate of complusory insurance against the owner's liability (Merchant Shipping Act 1995, s 163; Oil Pollution (Compulsory Insurance) Regulations 1997, SI 1997/1820). The scope of the Civil Liability Convention and the Fund Convention was enlarged on 30 May 1996 by the implementation of 1992 Protocols to both Conventions (Cm 3432, 3433). The provisions of these Protocols are reflected in the Merchant Shipping Act 1995. Sections 153154 of the 1995 Act include liability for the cost of preventive measures and damage caused by them where there is a grave and imminent threat of damage by contamination instead of actual pollution. Section 156(3) confirms that liability covers impairment of the environment, but restricts it to resultant loss of profits and the cost of reasonable reinstatement measures. However, the courts have ruled that secondary economic losses (eg by smolt producers or fish processors) not directly resulting from contamination are not recoverable: Landcatch Ltd v International Oil Pollution Compensation Fund 1999 Scots Law Times 1208; Alegrete Shipping Co Inc v International Oil Pollution Compensation Fund (The "Sea Empress") [2003] 1 Lloyd's Rep 327. Limitation of liability under section 157 may be excluded if the injury results from an act or omission committed "with intent to cause any such damage or cost" or "recklessly and in knowledge that any such damage or cost would probably result" (replacing the previous test of fault or privity). The financial levels for limitation and the liability of the Fund were raised (and increased again on 1 November 2003): see now Merchant Shipping (Oil Pollution Compensation Limits) Order 2003, SI 2003/2559. In section 170, the geographical scope of the legislation has been extended up to the British fishery limits (ie 200 miles). On 16 May 1998, the United Kingdom ceased to be a party to the 1969 Civil Liability Convention and the 1971 Fund Convention, and became a party only to the 1992 Conventions. On 16 May 2003, another Protocol to the Fund Convention was adopted (which entered into force on 5 March 2005) that establishes a voluntary International Oil Pollution Compensation Supplementary Fund, raising the total amount of compensation available to SDR 750 million per incident. Powers to give effect to this are provided by the Merchant Shipping (Pollution) Act 2006, s 1, and have been exercised in the Merchant Shipping (Oil Pollution) (Supplementary Fund Protocol) Order 2006, SI 2006/1265. In other situations (eg pollution by non-persistent oil or other substances) the common law still applies, and liability depends on proof of negligence: Southport Corporation v Esso Petroleum Co Ltd [1956] Appeal Cases 218. However, since liability for pure economic loss unaccompanied by damage to the claimant's property is not generally recognised by English common law, it does not compensate such persons as public fishermen, hoteliers and holiday makers for financial loss due to environmental damage. An International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea was agreed in May 1996, and powers to ratify this are provided by the Merchant Shipping and Maritime Security Act 1997, Sch 3. The 1997 Act also enables the Secretary of State to make regulations requiring ships in UK waters to have insurance or other security for third party liabilities (s 16).

In addition, an International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunkers Convention) was agreed on 23 March 2001, which will provide for compensation for pollution caused by oil carried as fuel in ships' bunkers. It came into force in November 2008, and the Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006, SI 2006/1244, have amended the Merchant Shipping Act 1995 in order to implement the Bunkers Convention.